Honeywell 2006 Annual Report Download - page 102

HONEYWELL INTERNATIONAL INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
(Dollars in millions, except per share amounts)
Restricted Stock Units—Restricted stock unit (RSU) awards entitle the holder to receive one share of common stock for each unit
when the units vest. RSU's are issued to certain key employees at fair market value at the date of grant as compensation. RSUs
typically become fully vested over periods ranging from three to seven years and are payable in Honeywell common stock upon
vesting.
The following table summarizes information about RSU activity for the three years ended December 31, 2006:
Number of
Restricted
Stock Units
Weighted
Average
Grant Date
Fair Value
Per
Share
Non-vested at December 31, 2003 3,103,513 $ 30.10
Granted 980,706 $ 35.63
Vested (205,463) $ 34.91
Forfeited (187,200) $ 32.14
Non-vested at December 31, 2004 3,691,556 $ 31.20
Granted 1,163,984 $ 37.39
Vested (424,175) $ 32.84
Forfeited (465,834) $ 30.11
Non-vested at December 31, 2005 3,965,531 $ 32.97
Granted 1,948,650 $ 39.11
Vested (759,015) $ 30.04
Forfeited (403,167) $ 34.25
Non-vested at December 31, 2006 4,751,999 $ 35.85
As of December 31, 2006, there was approximately $113 million of total unrecognized compensation cost related to non-vested
RSUs granted under our stock plans which is expected to be recognized over a weighted-average period of 2.36 years. Compensation
expense related to RSUs was $29, $24 and $24 million in 2006, 2005 and 2004, respectively. At December 31, 2006, the Company
reclassified $112 million of obligations to equity for restricted and deferred stock awards that are settled in equity.
Non-Employee Directors' Plan—Under the Directors' Plan each new director receives a one-time grant of 3,000 shares of
common stock, subject to specific restrictions.
The Directors' Plan also provides for an annual grant to each director of options to purchase 5,000 shares of common stock at the
fair market value on the date of grant. Options have generally become exercisable over a three-year period and expire after ten years.
Starting with 2007 option grants the vesting period will be extended to four years.
Note 21—Commitments and Contingencies
Environmental Matters
We are subject to various federal, state, local and foreign government requirements relating to the protection of the environment.
We believe that, as a general matter, our policies, practices and procedures are properly designed to prevent unreasonable risk of
environmental damage and personal injury and that our handling, manufacture, use and disposal of hazardous or toxic substances are
in accordance with environmental and safety laws and regulations. However, mainly because of past operations and operations of
predecessor companies, we, like other companies engaged in similar businesses, have incurred remedial response and voluntary
cleanup costs for site contamination and
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